Quoine

Imagine being able to trade crypto with the official blessing of Japan's financial watchdogs. That's what Quoine's Liquid Exchange brought to the table when it became the first cryptocurrency exchange fully licensed by the Japan Financial Services Agency. I've been following crypto exchanges for years, and let me tell you, government approval isn't something that comes easily in this wild west of digital assets.

The Rise of a Regulated Crypto Pioneer

Quoine's journey to legitimacy reached a significant milestone in 2021 when its subsidiary, Quoine Corporation, secured a Type I Financial Instruments Business license in Japan. This wasn't just another regulatory checkbox—it opened the door for derivatives trading for both retail traders and institutional clients.

When most exchanges were still figuring out basic compliance, Liquid was already operating under Japan's Payment Services Act and actively pursuing licensing in Singapore. This forward-thinking approach to regulation helped build trust in a market where skepticism runs deep.

One trader I spoke with mentioned, "Having an exchange that actually cares about following the rules gives me peace of mind. I don't have to worry about waking up to find my funds frozen because the exchange got in trouble with regulators."

Security Measures That Set Standards

Let's be honest—crypto exchanges aren't exactly known for their impenetrable security. But Liquid implemented security protocols that were ahead of their time:

• 100% cold wallet storage (keeping assets offline where hackers can't reach them)
• Mandatory two-factor authentication (before it became industry standard)
• 4-step withdrawal authentication process
• Comprehensive KYC verification including ID, selfie, and proof of residence

These security measures weren't just for show. According to users, Liquid dominated 70% of Bitcoin/JPY trading volume during its peak, showing just how much Japanese traders trusted the platform with their assets.

As one longtime user shared on a review, "Their withdrawal times are ridiculously fast—about 20 minutes. And deposits? I've seen confirmation in as little as 6 seconds thanks to their AI technology." I've used plenty of exchanges where transfers took days, so this is definitely impressive.

The Robust Trading Experience

Trading on Liquid wasn't just secure—it was actually enjoyable. The platform offered:

• Intuitive trading interface with customizable charts
• Multiple order types (limit, market, stop, trailing stop)
• Professional-grade order books and trade feeds
• Portfolio tracking with real-time P&L updates

For serious traders, the platform offered leveraged trading, though this came with the standard risk of liquidation if positions moved against you. Not that I've ever had a leveraged position blow up in my face or anything… cough.

The fee structure was competitive too—0.15% taker fees with no maker fees, encouraging market liquidity. For comparison, some exchanges charge upwards of 0.25% for both sides of the trade.

When Things Went Wrong: The 2021 Hack

Even the best security systems can fail. In August 2021, Liquid suffered a significant security breach resulting in a $97 million hot wallet hack. Despite the severity, user wallet balances remained unaffected—a testament to their security architecture.

The aftermath wasn't without controversy, though. A former employee filed a wrongful termination lawsuit alleging she was scapegoated for the hack. These kinds of internal disputes aren't uncommon after security incidents, but they do raise questions about the company's crisis management approach.

The FTX Lifeline and Acquisition

Following the hack, Liquid received a $120 million debt financing from FTX to strengthen their compliance and liquidity efforts. This financial injection helped stabilize the platform during a critical period.

Interestingly, FTX later acquired Liquid Global in 2023, a move that made sense given FTX's aggressive expansion strategy at the time. Of course, we all know how the FTX story ended… not exactly a fairy tale finish.

The User Experience

What really set Liquid apart was the attention to user experience. The platform maintained daily trading volumes of $1.1 billion with over 800,000 users at its peak.

I particularly appreciate exchanges that make deposit and withdrawal processes painless. Liquid offered:

• Wire transfer support (though no credit card deposits)
• Fiat withdrawals with 0.10% fees (minimum $15)
• No-fee crypto withdrawals (a rarity in the exchange world)
• FIO deposit addresses for simplified transactions
• Partnership with banks for fee-free EUR SEPA transfers

The minimum order size was just $2 USD, making it accessible for beginners testing the waters of crypto trading.

The Professional Touch

For professional traders, Liquid offered some particularly attractive features. Their API integration and 24/7 customer support made automated trading strategies possible, while the tiered fee structure based on 30-day volume rewarded active traders.

As one trader noted in a video review, the BTC/JPY pairs had spreads under 10 yen—exceptionally tight for crypto markets, where wide spreads can eat into profits.

What We Can Learn From Liquid's Journey

Liquid's story—from regulatory pioneer to hack victim to acquisition target—offers a microcosm of the cryptocurrency exchange industry's evolution. Their commitment to regulation and security set standards for the industry, even if the execution wasn't always perfect.

For users looking at crypto exchanges today, the lesson is clear: regulatory compliance and security measures matter, but even the most prepared platforms can face challenges. The difference lies in how they respond and whether they prioritize protecting user funds when trouble hits.

Whatever exchange you choose, remember that in crypto, the most important security measure is still the one you control: never keep more on an exchange than you can afford to lose. As the saying goes in crypto circles, "not your keys, not your coins."